Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

What is the fair gamble price?

  1. Mar 29, 2013 #1
    Say,

    I'm a bookkeeper of a gamble of flip coin. The price for each trial is 0.5, i.e. if there is a head I pay gambler 0.5, otherwise I get 0.5 from the gambler. There are only 10 flips or trials in the game, so that each gamble only can play 10 trials. I know to choose the 0.5 as the fair price because, I'm not going to lose money on average.

    But if I modify the game, and do not fix the number of trials, only stop the game sequence when the 3rd head appears. What is the fair price for each trial so that I don't lose money.


    Thanks
     
  2. jcsd
  3. Mar 29, 2013 #2

    chiro

    User Avatar
    Science Advisor

  4. Mar 30, 2013 #3

    ssd

    User Avatar

    In the 1st case, the statement "price of each trial" is meaningless. The idea is, for a fair (!) coin, payment by gambler and you should be same.
    In the 2nd case expected number of tails before the game ends is 3 (for a fair coin).
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook




Similar Discussions: What is the fair gamble price?
  1. Gambling Mathematics (Replies: 3)

Loading...